Archive for the ‘Small Business’ category

Easily Replaceable Employees

June 30th, 2010

If you’ve been running a business for any length of time in Kenya, you probably already know that it is extremely hard for a small business to get good employees. Yet, a business needs skillful and dependable employees to succeed. However, one of the keys to running a highly profitable and low-headache business is not depending on key individuals to make or break a business. While it would be nice to hire a bunch of overachievers to build and run your business, it’s a shaky strategy to rely on.

Searching for a Sales, for example, All-Star is not easy or cheap. The process to find good candidates and put them through the interview process can be very expensive and time-consuming. Even if you take months to go through a rigorous hiring process and think you found the person you were looking for, there is no guarantee that that person is even going to live up to expectations.

But let’s say that you do find that “diamond in the rough” – someone who is highly energetic and can bring in new business for you. You will have invested a decent amount of time training them and getting them ramped up. Everything has started running smoothly. Your new employee is bringing in a ton of new business and you don’t have to pay any attention to what they are doing or how they are doing it.

All of a sudden they drop a bomb on you. They got a better offer at another company and will be leaving in 2 weeks. You’re frozen in panic. You knew that it took 2 months to find this person and you were extremely lucky to find them. You went through 2 other people and wasted 8 months to get your “All Star”. Now you have to start all over again and be ready in 2 weeks. On top of that, you just kicked off a huge new marketing campaign that’s going to run but not have anyone to follow up and do the sales work. There is no way you’re going to be able to get new clients any time soon.

Enter The Real “All Star”
Here’s a slightly different situation for you. You’re tired of going through the crapshoot hiring process and praying that you get lucky and find a salesperson that can keep your business afloat. Instead, you decide to take matters into your own hands. You’re not going to rely on having the best talent, which is extremely hard to retain and keep happy. You’re going to depend on more readily available resources – lower wage employees.

How can your business do as well with someone who isn’t as talented compared to a rainmaker? Simple – you create processes that anyone can follow. You don’t leave your business up to chance. You create systems that you can constantly modify and tweak to make better and then you find people who can execute them.

Humans aren’t robots so you need to provide motivation to ensure that they do their job well. You can start providing incentive-based bonuses that are tied in with your revenues and profits so that everyone wins.

Now you have employees who are sufficiently motivated and happy because they are making more than they would with other similarly-paying jobs and you have turned a risk and a headache into a reliable and consistent system within your business.

What Kind of Systems Should You Put In Place?
Throughout this post, I’ve referred to salespeople when I talked about employees. That’s because they can have the biggest positive or negative impact on your business because sales and marketing for a small business has the biggest impact on the success of the business. And what we’re trying to avoid is the unpredictability that good and bad employees infuse into your business.

Your Sales and Marketing is the first part of your business from which you should remove the unpredictability of star employees. Here are some suggestions how to do that:

Create a Follow-Up Sequence that details every single contact you will have with leads from the day they become a lead, until a year later.
Write scripts and create every single marketing/sales piece that goes out to prospects. You should drive the sales message so that it’s not who gives it but what’s being communicated.
Add “Call-To-Action” in every sales and marketing piece that goes out. You shouldn’t have messages that say “are you ready to buy yet?”. They should spur on the prospect so they are calling to purchase from you.
Automate your sales presentations. Create web bases sales presentations that prospects can view at their leisure. This removes “bad days”, “being off your game”, etc. that affect even the best of employees. Nickel Pro can help with this, incidentally.
Create targeted marketing campaigns that deliver interested prospects. This way, you aren’t dependent on your employees ability (or inability to generate leads).

These are just a few examples of how you can replace highly skilled, valuable, but hard-to-find salespeople with replaceable, easy-to-find, and less expensive employees who provide the benefits without the headaches. Many of these ideas can be applied to your operations, customer service, and accounting. It’s all dependent on YOU setting up the repeatable systems that anyone can execute and not relying someone to just “get it done”.

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Posted in Small Business

Tags: advice Strategy

Fake it Till You Make it

June 29th, 2010

As a new business owner, one of the biggest problems that you’ll face is proving to new clients that you have the experience as a business to meet their needs. It’s just human nature. Everyone is careful with their money and they would rather go with a company that has a proven track record and not someone doing the work “on the side.” In some ways, it becomes a Catch-22. You can’t get clients until you have experience, and you can’t get experience until you get clients. As a new business, we faced similar problems and had some tough times getting clients for a while. We learned some “tricks” to make our business look bigger than it actually was – how to “fake it till you make it”, to borrow the saying

How to Make Your Business Look Bigger than it Really is

Give Away Your Service for “Free” – This is a common piece of advice that you’ll see and something that I don’t really like, so we put a little spin on it. You don’t want to attract people who are just looking for a deal. It’s the wrong kind of client who will take advantage of you and never be happy with the service that you provide. However, it’s still a good way to get the credentials you need to refer to when selling your product or service to other businesses. What we did is give away our products to our clients at our “expense”. Usually, there was some sort of “Cost of Goods Sold” that we incurred and we told them up front about this. They were willing to pay this token amount because they knew it was still a great deal, and we got some money, and the test clients that we wanted. In fact, we often used these clients to test our product (again, we disclosed this too) so it was actually just part of product development.
Hire a Receptionist – This is one of my favorite tricks that we used. By having someone answer all your incoming calls, your business suddenly gains a huge amount of credibility. Once businesses can support someone to answer the phones, most people will think that it’s successful. So what we did was hire someone at Kshs 10,000 per month to answer any incoming calls that we got. She would answer the calls and just e-mail us the messages or call us back if it was urgent. It didn’t take too much time for her and it was cheap enough for us. We just provided her with a mobile phone.
Outsource your Work – One of the more subtle ways to look bigger than you actually are is to outsource your work and then refer to them when talking to clients. If a client is asking you to complete some work and you say “I’ll have to check with my designer to see when I can get that to you”, it sounds a lot better than, “I’m really swamped this week – I’ll try to get to it when I can”. You also can say that you have several people working in your business. Probably a little too much in the gray area, but if you’re asked point-blank and saying you’re a one-person shop won’t work, it’ll do. Even if you tell clients you outsource most of the work, it’s usually ok, because it sounds like you’re a growing business.
Work with Partners – Besides coming with a stable full of qualified clients, one of the reasons that we wanted to work with partners when selling our products was that it afforded us the chance to build up our client list on our partners’ back. While we can’t refer to these clients directly when talking to prospects (or we just say that we have them through a partner agreement), we can still cite experience that we have working with clients.

Lying directly to your prospects isn’t a good idea because they’ll figure you out eventually. But if you can fake it till you make it by using the tips outlined above, you will find that it becomes much easier to attract new clients as prospects know that you are a successful business with a good track record.

How else can you fake it?

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Posted in Small Business

Predictable Success

June 25th, 2010

This books explores the ‘secret code’ to achieving success in business. The author, a serial entrepreneur having started over 40 businesses, states that there is indeed actually a formula to success, its just that we do not know about it.

In his own words, “As a serial entrepreneur who has personally launched over 40 businesses, and as a consultant and coach to hundreds of business leaders, I’ve come to realize that the ‘growth code’ is out there, in plain view for anyone who knows where to look. There is indeed a code, a pattern, a DNA if you will, to achieving predictable success. The difficulty is that because most business leaders work in a limited number of business environments during their career, they don’t have the opportunity to see the pattern recur often enough to successfully decode it.”

Download the book: Achieving Predictable Success

What do you think?

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Posted in Small Business

Tags: Freebies

How To Turn Your Skills Into A Real Online Business

June 24th, 2010

Open for business A lot of the people reading Like Chapaa have a skill set. They are strong in web design, writing, marketing, Web development, or some other different skills.

People with such skills who want to be entrepreneurs often end up selling their skills as services. That usually entails trading money for their time, expertise and experience. It’s the path of least resistance (and risk) and a way to form a source of income. The problem is that while the business might be moderately successful, there is a limit to how successful the business can be. There are only so many hours in a day and only so much that you can charge for these services (no matter how good you are). Since freelancing is not a real business model and does not scale, you should focus these skills on building a system-based business.

Here are some ideas to create a new business based on the skills that you already have.

Scale Your Skills
Instead of doing the work yourself, have 1, 2, 5, 10, or even 50 people do the work for you. Once you have other people doing the work, there is no limit to how big you can grow the business. Start by creating a manual detailing everything that you do and make it a repeatable process that someone else can follow. You will still have to find some people with some ability as you don’t want someone with zero creativity to design high-end websites for your clients. But if you create an efficient process in getting new clients and delivering their service at a reasonable, known cost, you can start scaling the business.

In order to reduce your risk, I would start out with contractors. Pay them on a “per project” basis so you are only obligated to pay when you get paid. Your profits won’t be as high and it can be tough to find reliable contractors with good prices and quality products but once you do, it becomes very easy to scale up your business. Start out with determining your profit margin and you can estimate projects based off of the quote you receive.

Create a “Product”
If your skills are in web design, pick a market and create your best web design that you can sell over and over again. If you create a really great web site with a lot of cool features for restaurants (newsletters, birthday club, email-a-friend), sell it to restaurants operating in different markets. You might charge a lower price for each site but it will require less effort to set up. It’s even something that you could hire a contractor to set up on a per-site basis.

If you are a writer, you can also create a ‘product’ around your writing skills. You just have, for example, to look for something that would benefit by having a well written guide/manual. For instance, many writers make money by writing How-To ebooks for platforms such as Joomla and Drupal. I know others who have created a complete and re-usable business plan which they sell to anyone looking to write a business plan quickly.

If you are an Adsense expert, you could sell a program to similar businesses of keywords and ads that are pre-built and tested to be very effective. Just make sure you don’t sell it to competing clients.

Become a ‘Digital Landlord’
This is very similar to creating a product, the difference being that you do not sell it outright but rent it out and collect a subscription fee. Please have a look at this: Landlord 2.0

The basic idea is to utilise your expertise to create a service. If you are an accountant, you could create an accounting system which you charge a monthly fee for people to use it either online or offline. When most people think of this, they think that it has to be a large undertaking. That is not the case, you do not have to recreate Quickbooks, the secret is to niche – create a simple accounting system specifically for freelance web designers (incidentally, such a system is badly needed).

If you are a marketing guru, you could create a marketing system for very small businesses and freelancers (guys earning 10,000 to 500,000 a month) – a system whereby the businesses completely outsource marketing to you. Again, such a system is badly needed in today’s Kenya (most of these business owners are too busy to market properly and would appreciate some help, as long as it actually generates more business).

Web Site Flipping
basically, this is the selling of websites. It might require a little more investment but you could also bootstrap and start with a small portfolio that you constantly turn over and make more money off of them. But the idea is that you should buy websites, improve them, and then sell them. Maybe it’s a website that just needs a few tweaks to convert better, or a site that needs some basic search engine optimization, one that hasn’t utilized Pay-Per-Click yet, or one that could use all of these changes.

Create systems to effectively find, value, purchase, and improve sites. Most people who flip websites might do it on a “one off” basis. They don’t create systems to repeat the process over and over again. I liken it to real estate flipping companies who have scaled their business so they buy multiple properties, have a select group of vendors they use to improve the properties, and then sell it. They have great systems in place. From the very beginning, they have a set budget and they know what changes they can make and how much value it should add to the price.

Create Software
Ok, nothing too original here but I think this is a case which people think too big. They think the only software worth creating and selling is something that nobody else has created. There are a lot of niche markets for which you can build useful software. You don’t have to create Microsoft Windows, just something that is useful to your targeted niche market.

For example – you could create an online scheduling service for businesses that take appointments like doctors, salons or beauty parlors. There is a lot of scheduling software out there but if you create a product specific for an industry, you have created a successful product.

And the best part about software is that once it’s created, there is very little effort to maintain it. Unlike trading hours for dollars, you can create a mostly passive form of income.

What Do All the Ideas Have in Common?
It probably wasn’t apparently obvious with each of these ideas but they all involve targeting a niche market. You’re not going to be able to create something that works for everyone but if you create something that has utility for a niche market, your system based business can grow quite successfully.

Image courtesy of Pheezy.

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Posted in Internet Culture, Small Business, Tips Hacking and Reviews

Tags: business Business Model Freelance Ideas Simple Business Strategy

Landlord 2.0

June 21st, 2010

I want to be the “Digital Landlord”. I want to own website real estate that I can “rent” to small businesses.

This isn’t about owning domain names since that would not work. People would just buy different domain names – they aren’t that important for local businesses.

No, this is about owning the building, or the website in this case, that is set up such that it is like a goldmine for people, renters. Renters would be willing to pay landlords money if the property is on a prime piece of real estate that practically guarantees a certain level of business, right?

It is Better to Rent than Sell

One of the first rules of real estate is never sell properties (or something like that). What it means is that you don’t usually want to sell a great piece of real estate if you can make money hand-over-fist from it.

We’re marketers with web development skills. We could build websites and sell them to our clients, but what’s the value in that? We would rather make mostly passive income by renting out an extremely high value service month after month.

Websites are worth the amount of time that the designer puts into the website plus a premium based on the designer’s/company’s reputation and ability.

But let’s change the perception on that product from a website to a marketing system. If it can generate Kshs 30,000 consistently, the business owners aren’t going to pay for the amount of effort it takes to create, they’re going to pay for that high value that it generates for them. I don’t know too many business owners who wouldn’t pay you Kshs 5,000 to generate Kshs 30,000 in new revenue.

Let’s say that you can do this just 2 or 3 times a month consistently. Don’t you think the business owner would be more than willing to pay you Kshs 5,000 a month for a LONG TIME than Kshs 25,000 just once?

Build a Ton of Buildings
If this works one time, why not do it over and over again? I can build a bunch of different buildings, or “client generating systems”. And I rent out a part of those buildings to a ton of different clients.

Let’s put some numbers on it:

I can rent out my system to 100 different clients in the same industry across the country at Kshs 5,000 per month (I won’t get too greedy)
That’s Ksh 500,000 per month for just one “building”
Once that works, I can build 20 different “buildings”.

What’s better than being a digital landlord? And I’m sure you can figure out the math for the monthly income….

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Posted in Small Business, Tips Hacking and Reviews

Tags: Ideas

What If The People You Outsource To Are Not As Good As You?

June 18th, 2010

Following yesterday’s post, Outsource Everything, I got a few emails from people who wanted to outsource but were unsure whether anyone could get the job done as well as it needed to be. That’s an understandable reaction and it was something that I fought when we tried to outsource some of our work. Sometimes it feels like it’s more work writing up a description of what needs to be done rather than just doing it yourself.

So I put together a list of 5 Reasons Why You Shouldn’t Care if Your Outsourcers Can’t Do the Work as well as You Can:

So what? – My first response is so what if they can’t do the work as well as you. I guarantee you that they won’t be able to do things as well as you can because they can’t read your mind. The problem is that most people expect the work to be perfect right away. It doesn’t have to be. If someone else can do 80% of the work and you just have to go back and clean up the last 20%, you still saved a lot of time. Unless you find someone you really trust (and that takes a lot of experience), you should do some type of quality control over what’s done. Don’t just think you can hand it off and forget it.
You’d be surprised how well they can do the work – This isn’t always true but it happens more often than you would think. Often times I send off instructions and just know that I will get some horrible deliverable and there will be a million questions along the way. Then I’m pleasantly surprised to see that they exceed my expectations.
Some things you’ll never be able to get rid of - There have been some tasks that I wanted to hand off to someone else to do because I didn’t like doing them but then I realized there was no way to do this. These aren’t tasks that you should be outsourcing because they aren’t something that you can provide step-by-step instructions to. These are things that you have to think about and there is no way that someone else will be able to know what you’re thinking. Just outsource everything else, bite the bullet, and do this one yourself.
Don’t hire them to do everything you do – Make sure you have specific tasks for them. Don’t provide them high-level needs and expect that they will think of everything. If you can’t write it down in steps, it’s not something that you should hire them to do.
Find things that are monotonous – A lot of your activities might have a “thinking” component and a monotonous component. Don’t be afraid of doing the “thinking” parts and handing off the monotonous components. We do this a lot when we outsource web design. We determine what the overall design and feel of the site is and then outsource the actually coding with clear instruction on what needs to be done.

The key is to remember that you’re not hiring someone to solve world peace. You’re just hiring them to do some monotonous tasks for you. It’s not going to be everything you do but you’ll start finding more and more tasks that you can write instructions to and that you can hand off. And don’t be afraid to break it down so you provide most of the brainpower and they do the rest.

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Posted in Small Business, Tips Hacking and Reviews

Tags: Freelance Outsourcing

Outsource Everything

June 17th, 2010

One of the things I am a huge fan of is that every Business Owner should outsource everything that they possibly can. I know I’m not breaking any ground with this idea (if you want to read a great book on the power of outsourcing, I strongly recommend Thomas Friedman’s, The World is Flat) but what I am advocating is pushing this idea to the max. I look at everything I have to do to see whether it’s something I can just outsource it so that I can free up even more of my time.

One of the first really big projects that we received was for a web application in which we were paid a HUGE amount (our largest project for us at the time). This was a project that we scoped out as taking at least 3 months of our full attention. This is back when we were just testing the entrepreneurial waters and had other full-time jobs. All of our spare efforts were focused on this first product delivery, and we delivered as planned by focusing our efforts on it fully.

That project led to another one that was 3 times as big as the initial project and took us another 6 months to complete. Now it wasn’t for 3 times the dollar amount because of a partial equity deal we were involved in. The problem was that when it was all said and done, we had put in about 9 months, and all we really had to show for it was 1 client, 1 project, and nothing else for our business from the previous 9 months.

We don’t regret that period of time. We had a lot of flexibility because of our situation, we learned a lot, and we spring-boarded from that to working on the business full-time, but there was an important lesson learned there.

I Should Have Outsourced Everything that Didn’t Need Us.

The development of the application that we spent all of our time and effort on should have been outsourced to a development company that could have completed the effort based on the requirements that we had already created. We would have made a lot less profit from those efforts but we could have spent that time (which was A LOT of hours) on developing new business, creating new products, or just being lazy!

The important distinction are those efforts for which we are required and those for which we are not. New product/service development and most marketing efforts require our involvement because it’s very tough to outsource something when it’s not even defined yet. But for something that is relatively basic like web application development, we should have outsourced the efforts.

What Else Should I Outsource?
Honestly, if it is something that would take more effort for me to write up the instructions for someone else to do, then I’ll usually do it myself. Otherwise, I delegate it off to someone else. These are just a few things that we did ourselves until just a few times when we realized that it’s much more efficient to hire someone else to do it:

HTML Updates for existing websites
Contact Generation for Marketing efforts
Direct Mail Generation for Marketing efforts
Service Delivery fulfillment for direct mail pieces in our online marketing system
Follow-up calls to existing leads
Sales Lead generation and adding new leads to our contact list
Web Application development

The Financial Mathematics of Outsourcing
The finance behind outsourcing is pretty obvious and has been discussed many times over so I won’t spend much time on it. Simply put, if you can get someone to do something for Ksh 10,000/- and your time is worth more than that Ksh 10,000/-, it is simply an efficient form of resource allocation. Or to put it another way, it might cost you Ksh 5,000/- to outsource a very menial task to someone and during the time that you might have done that yourself, you could create a new marketing campaign that generates Kshs 50,000/- in new business.

You don’t even have to do anything else during that time. If you would just like to spend less time working in your business, the Kshs 5,000/- might be a small cost for the additional free time that you generate.

You Don’t Necessarily Need Offshore Outsourcing
A lot of people automatically associate (and confuse) “outsourcing” with “[offshoring]“. Offshoring is just one way to outsource your work. You can also outsource it to onshore companies. By far, the majority of our outsourcing work goes to local resources. It’s just been easier for us in most cases to pay a little extra money and get someone we can communicate with easily.

Regardless of where you find people or companies to outsource your work to, you need to start outsourcing everything so that you can continually focus your efforts on building your business.

Photo courtesy of MarkHillary.

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Posted in Small Business

Tags: Outsourcing

Growing A Business Without Money

June 13th, 2010

Thinking up a business idea and launching it is pretty easy, if you ask me. Running the business and growing it is a whole different story. It is where almost all businesses fail at.

I’m very much in favour of bootstrapping and I discourage everyone who wants to start a business by borrowing. However, we must realise that growing a business with no money is very hard and nearly impossible. When you do not have money to spend on your business, you end up being the chief employee – you do all the work. This leaves you little to no time for doing the more important stuff like thinking up (and implementing) new strategies, marketing, etc.

Businesses that are trying to grow with little or no money face a very steep challenge and, if not careful, may end up always being on the chase for a big break (a well paying client/deal) that will enable the business to normalise its activities. I consider such businesses to be operating more on luck than anything else. However, I think every entrepreneur worth his salt has passed through something similar.

Unless you just want to learn how to operate under extreme pressure, find a way to get some money to get your business up and running. Debt is bad, but it may be a necessary evil.

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Posted in Small Business

Doing it like Fareed

June 9th, 2010

I’m not a big fan of X-Fm Djs – I find them annoying. But I love my rock, so I’m glued to the station all day.

Fareed Khimani I have massive issues with. He has a nice voice, and he’s kind of cute, but he has this thing: nag-nag-nag-whine. Also, he can be a little rude – which I guess is the whole point of the show.

I like him for one thing though: he got me to like Alice in Chains. Let me explain.

Some weeks ago, I was in a matatu on my way to work. Almost all matatus like to play The Maina and King’ang’i show, or as I prefer to call it, Matatu FM. Matatu FM has great music, but the presenters annoy me. Their call-ins are even worse. So my morning routine is get into a mat, plug in my earphones, tune in to X-Fm, and crank it loud enough to drown the matatu.

Yes, I expect to be deaf soon.

Anyway, I was listening to Fareed, and he started talking about how he was going to play the coolest song ever, and how it would get us all jumping, and how if we didn’t like the song, we were boring.

He hyped the song five more times before he finally played it – twice. It was just a regular rock song, and I didn’t get what the hype was about. But because he’s said it so many times, the name stuck in my head.

The name of the song in Man in the box, by the rock band Alice in Chains.

Later, he picked out his favourite part of the song, which is the riff-and-chant in the beginning. He played that bit over and over again, explaining how cool it was and why.

Then, he declared it the ‘May Traffic Song’, and for the next one month, he played it two or three times a show, usually after the traffic update. I learnt to expect the song, and within a few days, I’d learnt some of the words.

I still have no clue what the song is about, but when I eventually found myself singing along and enjoying – even loving it, I was amused. The song in itself didn’t impact me, but hearing Fareed get so excited about it, and having it played so often, I guess it grew on me.

So here are some business lessons we can learn from this cute, annoying man.

1. It’s all about hype

Create awareness of your product, service, or business. Make it a big deal. It can be word of mouth, hot air balloons, luminous rollerblades, a regular twitter account, glow-in-the-dark vuvuzela, anything really.

Your product doesn’t have to match the hype, but it will get noticed. And once prospective clients notice, you’ll have a foot in the door. That’s always a good place to start.

2. Be persistent

Fareed’s song didn’t impact me the first time I heard it – or even the second or third. But on day 2, I noticed it’s great walking music, and by day 3, I liked the words to the song. They are so fun to yell to.

Keep yourself in the client’s mind. Make follow-up calls, get sponsored in prominent places, remain visible.

3. Be consistent

The thing with this song is it doesn’t change. You’ll hear it a million times and it sounds exactly the same. You might pick a word or note that you hadn’t heard before, but the content is the same.

Once your client notices you and starts to like you, be sure that the thing they like is always there. Going herbal can sometimes be a bad thing.

4. Tap into mnemonics

People make links in their heads, often without knowing it. Baby girls get pink, little boys get blue, metro kids wear orange, valentines means chocolates, roses mean passion and love. There isn’t any specific reason for this. They’re all just trends that caught on.

Fareed go me to associate man in the box with traffic. So every time I’m in a jam, I wait to hear the song play, even when I’m tuned to a different station.

Associate your product with something popular, or trendy, or common, something with staying power, something that clients see every day. They’ll become conditioned to your work. That’s why in Kenya, all detergents are ‘Omo’ and all margarine is ‘Blue band’.

5. Stand out

This song has a great riff, rebellious lyrics, and an interesting beat. But more than that, the band has an amazing name. It’s hard to forget anyone called Alice in Chains. Why is Alice in Chains? What did she do? What kind of chains are they? And more to the point, who the- is Alice?

Have your product stand out. It can be as simple as giving it a catchy name or colour, or as complex as making it actually good. You could also pull a saf-com and make it really, really ugly. After all, cute fades – just look how quickly we get bored of babies.

Either way, pull a Krest with it and stand out from the crowd. Make it memorable.

Speaking of sodas and pop music, there’s a Sprite advert on TV that has teenagers ramming each other and making bubbles. At some point, a really prettylady makes a stage dive.

I have no clue what the advert means, but I love the music behind it. Does anyone know what it is?

Crystal Ading’ is a professional author, editor, rock lover and mother. Her work is available through www.threeceebee.com.

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Posted in Small Business

Tags: Strategy

How To Run a Virtual Business

June 8th, 2010

I hate to call our business a virtual one, but that really is what it is. We don’t have a bricks-and-mortar office location (unless the post office counts) besides our home offices. Some clients might consider it unprofessional but by running our business remotely, we are able to operate more efficiently and at a lower cost. We have created systems to allow us to operate our virtual business with the same effectiveness if we had an office full of people.
The Advantages of Operating in a Virtual Business

The biggest advantage of running a business is the significant cost savings. Without having to pay tens of thousands per month in rent, we have more flexibility in our cash flow and a much lower overhead costs.
We can run the business remotely. We are not tied to a particular location. We can quite literally work from anywhere in the world.
No one has to be in the same location. For instance, I study in the US and only come home occasionally but the business still runs smooth! We talk often and e-mail several times a day, but we aren’t forced to be in the same location. We can also hire employees and sub-contractors from different locations.
You can live wherever you want. This is similar to the last one but it’s a bit different. When I come back home I do not want to live in Nairobi. If our office was based there, this would not even be an option.

Running our Virtual Business
Creating a virtual business was a necessity based on how we started – part time. If we weren’t working on the business full-time, there was no way that we could have justified creating a bricks-and-mortar office for a business in which we almost never meet our clients. Once we went full-time, there was no need to change what worked. Here are some of the simple steps we took by necessity and now, by choice, to run our “virtual busines”.

Don’t Look like a Virtual Business – A business without an office, doesn’t always inspire the most confidence in potential clients, so make sure that you have all the outward appearance of a professional business. This is pretty easy and usually just means having office phone lines, publicly displayed physical offices (which my actually be your dad’s), normal office hours, etc.
Always Choose Online Software – By necessity, we have always gone with online applications as opposed to desktop applications so that we could access the same information from multiple locations. For example, we are a huge fan of Google Apps over any of the other applications. We are also thinking of going with the online version of Quickbooks over their standard desktop applications. One of the other advantages is that it provides more dependability. Even if a computer crashes, we have nothing to worry about since it’s just a web site away.
Make Sure Your Tools Work Remotely – Similar to the last point but one of the first things that we did when setting up our business was to get a VoIP business line. It’s not that big of a deal now but it was pretty new then. We wanted something that we could operate from anywhere and that was configurable and accessible from the web. We also use tools like eFax so that we can both receive faxes and we have an online version, which is much easier for us to operate with. We also have e-mail accessilbe phones so that we aren’t tied to our computers (which need to be laptops, of course!)
Keep Soft Copies of Everything – Again, by necessity, we have been forced to keep things online instead of printing them out and dealing with them by hand. Instead of filing cabinets, we try to keep everything on an online back-up site.

The Future of Our Remote Business
Someday, we may get a formal office location, and that’s only because it will be more cost advantageous when we bring some of our outsourced work in house. However, that doesn’t mean that we won’t still run a virtual business. Since I’m so lazy, there is no way I will be able to make it into an office everyday or have less than 2 vacations a month. Therefore, we will still need to run everything remotely.

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